1099 rules

[speeder]

Does anyone know off-hand what the basic guidelines are for 1099s, specifically when they apply? Is it something that I could fill-out for someone who did a small amount of work for me, or do they need to fill it out, etc? TIA.

[look 171]

You fill it out so they can file it as income with the IRS.

[Dueller]

Everything you need to know about 1099's and more in the link below...GENERALLY if you pay someone over $600 you need to fill out a 1099 and send it to IRS with a 1096 transmittal by february 28 (?) I think. You give the person who was paid a copy for them to include income on their tax returns. There are various 1099's...you're probably looking at a 1099-MISC if someone did contract labor for you.

http://www.irs.gov/efile/article/0,,id=98114,00.html

[Hugh R]

Gotta know their SS#

[Gogar]

Dueller is correct about the $600, but you must furnish the 1099 to the payee (recipient) by the end of January, and to the IRS by the end of February. You must know their SS# and correct address.

[LeeH]

It's an easy form - you fill it out for someone that you paid more than $600. Summary form is the 1096. 1099 can be requested from the IRS web site and filled out by hand (there is a PDF online for reference purposes, but you can't just print these out - you have to use an original form). If you owe someone a 1099 you should already have a W9 on file - which is the request for taxpayer ID number. This can be printed out from the IRS PDF.

[Dueller]

FWIW there is a $50 penalty per 1099 not filed timely.

[Don Plumley]

I used this service to file, print and send the forms to both my 1099's and to the IRS. Very inexpensive, worked great: http://www.efilemyforms.com/

[speeder]

What if I do not have their ss# or address?

[look 171]

Originally Posted by Hugh R

Gotta know their SS#

how the heck do you varify that #? I had trouble with it in the pass with an electrican I no longer use because of this issue. I get a letter back saying it doesn't match name and number. I am thinking they can BS the number so they don't have to pay tax on their income.

[einreb]

Originally Posted by look 171

how the heck do you varify that #? I had trouble with it in the pass with an electrican I no longer use because of this issue. I get a letter back saying it doesn't match name and number. I am thinking they can BS the number so they don't have to pay tax on their income.

First thing to do is ask for a w-9 when you have someone work for you. they are signing their name that they are providing accurate information.

you can file the 1099 without the SS, but get the correct address and name. You run the risk of the IRS coming back to you and requesting it, penalties for filing late (if you are sending it now), etc. its a risk/reward thing after the fact.

[look 171]

Originally Posted by einreb

First thing to do is ask for a w-9 when you have someone work for you. they are signing their name that they are providing accurate information.

you can file the 1099 without the SS, but get the correct address and name. You run the risk of the IRS coming back to you and requesting it, penalties for filing late (if you are sending it now), etc. its a risk/reward thing after the fact.

Now I know, and I try to not hire new sub contractors. We were in a pinch for time. after 3 month of calling without responds, I finally got it.

[Hugh R]

One trick I've know people to do, is that if they get stiffed by a client and never want to do work with them again, 1099 them to the IRS for the fees they stiffed you on, and let the IRS eff with them.

[slodave]

Originally Posted by speeder

What if I do not have their ss# or address?

I have a client that sent me a 1099 without my SS on it. I don't know why they didn't call and ask for it. It just says "Applied For" under the RECIPIENT'S identification number. Didn't seem to bother my accountant.

Dave

[RWebb]

1099 is for an EMPLOYEE

not a guy that works on your house - he is almost always an independent contractor

[slodave]

Originally Posted by RWebb

1099 is for an EMPLOYEE

not a guy that works on your house - he is almost always an independent contractor

Not true. I am not an employee for any of my clients. It's even listed as "Nonemployee compensation".

[speeder]

Originally Posted by RWebb

1099 is for an EMPLOYEE

not a guy that works on your house - he is almost always an independent contractor

That's the question I'm really after. Who needs to be 1099'ed? When a plumber comes and does a $900 job at your house, you certainly don't 1099 him.

[look 171]

Originally Posted by speeder

That's the question I'm really after. Who needs to be 1099'ed? When a plumber comes and does a $900 job at your house, you certainly don't 1099 him.

No you don't unless you deduct it. if the plumber did 600 bucks of work for you on one of your jobs, then you 1900 him. You and I are in the similar business I think. I give all my subs a 1099. Including the cleaning ladies that do final dusting. They are subs also. I always use the same people, so SSC# is not a big issue. Many people don't like to give out their SSC#.

What type of construction do you do? Restoration?

[Dueller]

Originally Posted by speeder

That's the question I'm really after. Who needs to be 1099'ed? When a plumber comes and does a $900 job at your house, you certainly don't 1099 him.

As a general rule of thumb, if YOU'RE going to deduct it as a business expense you need to 1099-MISC as non-employee compensation if its over $600. If you hire a cleaning lady for you're home and she's making more than $600/year and you exert control over her work (who, when, hours, methods, supervise her work, etc) she's actually an employee and you should be giving her a W-2 and withold FICA, etc. However, if you contract with Mighty Maids or a Pest control Service and they control who performs the work they are independent contractors.

They common law control test that determines the status of someone performing service for you is a bit of a moving target.

Give us some examples of what you're dealing with and you'll get some opinions.

[speeder]

Here is the deal, guys: I do renovation and painting work for mostly (99%) private home owners. I report my income after expenses and deductions, etc., and am self-employed.

I did a job last year for ~$1400 on an apartment bldg. that is owned as an investment property/business. I got a request from said client for my SS# so that he could 1099 me a while back. No problem, under normal circumstances. I'd give it to him if it helped him out. Unfortunately, circumstances are anything but normal. The guy called me to do some "handyman-type" tasks for me after the initial job was done satisfactorily that he has never paid me for. He burned me for a couple hundred lousy dollars that I had to write-off as a bad debt and move on. When he asked for my SS#, I ignored him. It was like suddenly he needed something from me, tough shyt loser. He also inflated the amount he paid me in the request, including reimbursement for materials that I bought but he paid for.

To make an even longer story shorter, he is now claiming that I owe him additional work that is very specifically not in the written agreement I had with him and is a complete fabrication/invention and threatening "legal action" against me if I do not comply. I'm not intimidated in the least but also not inclined to give him ANY personal info at this time. It is extremely rare to have disputes in my small business, they are pretty basic agreements and I perform my part. He was perfectly happy with the finished job at the time and paid me.

There is a bit more to the story, but it reads like either a sociopath, (him), or a dishonest contractor, (me), depending on who you believe. I may delete this post due to the possible small claims case I will have with him, never can be too careful.

Thanks again for all of the valuable advice.